Self-managed super funds (SMSFs) are Australian Taxation Office (ATO) regulated funds. Generally speaking, SMSFs are private superannuation funds. They are required to have four or fewer members, all members are trustees or directors of the trustee company, no trustee of the fund receives any remuneration for their services as trustee and no members are employees of other members.
Having an SMSF can provide greater control for some individuals, having full oversight into all aspects of your super, rather than relying on an industry or retail fund to manager your super. While this may sound appealing, managing super independently, it does involve experience, education, management, compliance and administration costs as well as a detailed oversight into the superannuation environment.
While professional super funds are regulated by APRA (Australian Prudential Authority), SMSFs are regulated by the ATO, meaning that regulatory oversight differs. For example, in the instance of investment theft or fraud, funds regulated by APRA can apply to the government for compensation which if funded via an industry levy, whereas SMSFs cannot, with the pursuit of compensation coming out of your own expense.